Schadenfreude

by hilzoy

From the Washington Post:

"In the tiny world of people who keep the books for Washington's multitude of political committees, Christopher J. Ward was considered the Republican "gold standard," in the words of a former co-worker -- one of the few people with so much expertise in election law that everyone wanted Ward's services.

The quiet workaholic is listed as treasurer for 83 GOP fundraising committees over the past eight years, according to Federal Election Commission records. In the past five years alone, he oversaw the accounting for committees that raised more than $400 million, $368 million of it at the National Republican Congressional Committee, according to a Washington Post review of those records.

But in late January, Ward, 39, was dismissed as the NRCC announced that it had found financial "irregularities" that "may include fraud." The FBI is investigating what appears to be "a significant amount of money" missing from the House Republican fundraising arm, according to a law enforcement official.

Now the dozens of GOP lawmakers who had clamored for Ward's help are apprehensively poring over his work along with FBI investigators, trying to learn more about the finances he oversaw. Several lawmakers have told Rep. K. Michael Conaway (Tex.), head of the NRCC's auditing subcommittee, that they think money may be missing from their political committees, as well. (...)

The first inkling of trouble came when Conaway took over the NRCC's auditing subcommittee in early 2007. A certified public accountant himself, Conaway said in interviews that he asked for something considered routine in the corporate world: an audit of NRCC books for the previous year by an outside firm and a meeting with the auditors.

"My expectation was that that frank meeting would take three minutes," Conaway said.

Instead, Ward kept putting him off, he said. "Okay, we'll get it for the next meeting, we'll get it for you," Ward said, according to Conaway, who became suspicious of what he described as Ward's "passive aggressive" behavior.

He said Ward avoided the issue for months, until January, when Ward told Conaway that he and GOP lawmakers would meet with auditors. But Ward canceled the meeting 30 minutes before it was scheduled to begin.

Republicans called the outside firm and found out that no audits had been done since 2003. After looking at the documents Ward had given them for each year, they determined that he had fabricated them, according to Davis and other officials with knowledge of the matter, who spoke on the condition of anonymity."

The NYT reports that "hundreds of thousands of dollars are missing and presumed stolen."

Tom Cole, the head of the NRCC, has tried to reassure his members that this scandal "will not adversely affect fundraising in the long term." He'd better hope it doesn't. After all, the NRCC is going to have to defend dozens of seats left vacant by all those Republicans who have decided that it's time to head for greener pastures. And besides:

"The investigation into the NRCC's finances is another in a series of blows to House Republicans. The NRCC, for the first time in any political observer's memory, raised less money in 2007 than its counterpart, the Democratic Congressional Campaign Committee. The Democrats raised $67 million to $49 million for the Republicans.

At the end of January, the DCCC had more than $35 million cash in its accounts to the NRCC's $6.4 million."

And that was before they dropped $1.2 million on their failed attempt to hold onto Dennis Hastert's old seat.

Criminality: no fun at all when you're the victim, not the perpetrator.

***

UPDATE: Oops: it seems the NRCC has restated their figures, and their cash on hand is just $5.7 million. Also, they think Ward might have stolen around $1 million. If I were a donor, this would certainly make me feel confident.

Comments

[Ben Alpers]

Tom Cole is my Congressman. The one good thing I can say about him is that his performance in the House suggests that he won't be doing the GOP much good leading their Congressional election effort.

Schadenfreude indeed!

[Nell]

I've said it before here (you could look it up):

Do not fall for the "we were innocents defrauded by a trusted staffer" line on this unfolding story.

The senior leadership of the NRCC loosened internal accounting procedures in significant ways just as the Republicans took over the White House and the K Street Project and "permanent majority" activities escalated.

Ward almost certainly did embezzle and defraud the NRCC and several (many?) of the other committees he worked or, but he was taking advantage of procedures set up to allow vast amounts of money to be moved around without close observation. Anyone who believes this was solely Ward's doing, and not set up to turn soft money into hard and/or to evade other campaign finance restrictions, is closing his or her eyes to the abundant evidence of the last eight years.

[Nell]

Shorter Nell: Senior NRCC leaders were perpetrators whose setup allowed them to become victims as well.

[John Thullen]

The nice thing about Republican officeholders and their staff, however, is that they purchase the service of cheap hookers, thus keeping expenses low and maintaining fiscal integrity.

[KCinDC]

At least people in the Mafia are smart enough to understand the difference between looting the businesses that they take over or intimidate and stealing money from their own organization. If you've got a criminal enterprise funneling more and more government funds to cronies, taking the funds of the enterprise itself is killing the goose that lays the golden eggs.

[trilobite]

Nell, that was my first thought as well. In fact, I would be surprised if it does not turn out that some of the "embezzled" money was actually passed under the table to otherwise legitimate recipients. Most financial frauds begin when the perpetrator "borrows" from one account to cover promises made to a big client, and then the money keeps being a little shorter than expected so there is no way to plaster the holes up (because the temporary problem turns out to be systemic and unfixable). Often, the fraudster embezzles for his own personal finances only after the whole thing is already out of control, in a sort of panicked denial of reality.

[Eric Martin]

Shouldn't that be Schadenfraud?

(italics for Farber's benefit)

[Jesurgislac]

When you decide to run the country like crooks, is it really surprising that crooks show up to work for you?

[The Modesto Kid]

The nice thing about Republican officeholders and their staff, however, is that they purchase the service of cheap hookers

I believe it's been established that they pick up guys in airport restrooms.

[Jesurgislac]

Or attempt to turn pages.

[Slartibartfast]

I mean, just look what happens:

Eliot Spitzer (R) holds a news conference in New York City with his wife Silda by his side

Cause? Effect?

Purely kidding, of course.

[Nell]

OT: I just have to say this: Closed sessions of Congress are bullshvt.

The House leadership has decided to hold one, at the request of the Republicans, in 15 minutes to vote on the FISA "reforms". Whether they end up voting for telecom immunity or not, this is shameful, cowardly, craven, and dettttthpicable.

Resume topic.

[felix culpa]

Well, actually, (or isn’t that what you were suggesting?

[felix culpa]

Seems the closed session isn’t for purposes of voting, but for testimony Boehner says “the public doesn’t need to know about’.

It would only be the fourth such House session since 1830.

The">http://snipurl.com/21q15">The vote is postponed until tomorrow.

[Mike Schilling]

Eliot Spitzer (R)

I believe that's "R" for "Reprobate".

[bobd]

Criminality: no fun at all when you're the victim, not the perpetrator.

I'm not sure I understand the point of this comment in this context. Has the NRCC committed a crime that has magically stayed out of the news?

Or is Hilzoy implying that an organization that differs in opinion from her is criminal?

Can we not be more like Obama and rise above this behavior?

Is this another attempt at trying to crush dissent? Accuse someone or an organization that you might disargree with of being criminals. I would think that is slightly over the top.

Obsidian Wings "This is the Voice of Moderation. I wouldn't go so far as to say we've actually SEIZED the radio station . . . "

Might I suggest a more appropriate header?

Obsidian Wings
"This is the true Voice of Fascism. I wouldn't go so far as to tolerate diversity of opinion when I can silence it."

[hilzoy]

bobd: I was referring to the Republican leadership in Congress, which has a passing connection to the RNCC. Several of its members having been indicted, I don't think that's over the line.

If you think that my blog posts count as crushing dissent (do you feel crushed? just asking), or that ObWi is fascist, I can only say that I hope you never find yourself in a country in which dissent is genuinely crushed, and fascists are actually in power.

[trilobite]

In case hilzoy finds it ethically awkward, as a moderator, to ban a commenter for violating policy as to herself, may I ask that one of the other moderators ban bobd for calling Hilzoy an intolerant fascist? It's not just the insult itself, it's also that it came out of nowhere, which is the true mark of a troll.

Vox populi, vox fascisti.

[DaveC]

Rezko, Hsu.

I know, I know that the names are unfamiliar around the ObWi, and that the Republicans are creepier and should be more like Mafia or something. But when sometimes the money skimming comes before the contributions, and sometimes the payoffs from shakedowns come later down the line.

It's not really crushing dissent, bobd, just specific areas of interest - how bad the Republicans are - and some other folks get a pass. If you know where to look or listen, you will see both sides of the picture.

As far as being fascistic, I doubt that hilzoy dresses up in a uniform and parades around her den accompanied by martial music. I, however, personally like John Phillip Sousa'a "Stars and Stripes Forever" march. Dueling piccolos and trombones.

You'll never get that kind of quality music from Joan Baez or Woody Guthrie.

[Jay Jerome]

trilobite: "In case hilzoy finds it ethically awkward, as a moderator, to ban a commenter for violating policy as to herself, may I ask that one of the other moderators ban bobd for calling Hilzoy an intolerant fascist?"

How about getting you banned as an intolerant censor?

[gwangung]

I'm not sure I understand the point of this comment in this context. Has the NRCC committed a crime that has magically stayed out of the news?

Has the right wing pounded on liberals and Democrats for being corrupt and unworthy of governmental power since the 1990s (and if you were unaware of that, I suggest that your search for partisanship should start very close to home). Some context is helpful.

I think the point being that wariness over corruption and abuse of power applies across the spectrum, in all large organizations, whether public or private. It is not a quality exclusive to one party or point of view, nor is vigilance over abuse of power or corruption.

If Republicans were complaining about abuse of power in the previous administration, then it would behoove them not to abuse power or be corrupt when they were in power.

(And of course, we are not making the silly accusation that you yourself are defending this sort of criminality---we're assuming you hate it as much as anyone else).

[Slartibartfast]

I prefer The Liberty Bell, for obvious reasons.

We're not only crushing your dissent, bobd, we're crushing your head. All of us. Crushing. Your. Head.

[gwangung]

How about getting you banned as an intolerant censor?

trying to test the posting rules, are we?

[Jay Jerome]

DaveC: I don't think hilzoy is fascistic either, more like she's become a dazed and confused Obama groupie, so that it would be fair to rewrite the banner to read:

Obsidian Wings:
“This is the true Voice of Obama Infatuation. I wouldn’t go so far as to say we’ve actually THROWN ourselves in a SWOON on his alter… yet.

[Jay Jerome]

gwangung "trying to test the posting rules, are we?"

We can never be sure that the opinion we are endeavoring to stifle is a false opinion; and if we were sure, stifling it would be an evil still. ~John Stuart Mill, On Liberty, 1859

[Grover Gardner]

Beware the "quiet workaholic."

[Jay Jerome]

OT: One Small Step (in the right direction).

"LANSING, Mich. - Michigan Democrats are close to an agreement with presidential candidates Sens. Hillary Rodham Clinton and Barack Obama to hold a do-over primary."

[yave begnet]

Reading the description of Ward's obfuscation and downward spiral above, I found myself wondering if this was real life or a movie where Marisa Tomei takes her shirt off eight times.

[Bill]

Beware the "quiet workaholic." Yes.

and a corollary:

Never trust a smiling accountant.

[Lurker]

A closed session of House is not very likely to remain secret. There are several hundreds of representatives there. Each will brief their most trusted staffer and perhaps their spouses about the goings-on. After that, some 2,000 people are into the "secrets" included in the proceedings. A secret known by 2,000 people is no longer a secret. It will surely leak. That is why the congress has sub-committees for intelligence etc.

On the other hand, a "closed" session gives a great chance for spin: "We gave them information that should have turned their heads, had they been true patriots. Oh, sorry, that information is classified and we can't discuss it in public."

[Hartmut]

Glenn Greenwald's take on the closed door session:
http://www.salon.com/opinion/greenwald/2008/03/13/house_gop/index.html>link

[ThirdGorchBro]

I can understand why Jay Jerome thinks this site has become the True Voice of Obama Infatuation, though I don't think hilzoy is the type to swoon at anyone's altar. I can appreciate the excitement many liberals must feel at the prospect of the pendulum of American politics finally swinging back to the left (or even to the middle), and the hope they feel that an Obama victory would send a fresh breeze through Washington.

It's kind of like the feeling I had when the Republicans took control of Congress in 94. I can only hope their hopes are not as cruelly dashed as mine were, and that the Democrats will not become as corrupt as the Gingrich-Bush-DeLay Republicans. (hey, now I'm back on the topic of the post!)

[liberal japonicus]

Nice to see you back round these parts 3GB and hope everything is going ok.

[Bernard Yomtov]

Beware the "quiet workaholic."

Indeed. Many banks have rules requiring officers to take a certain amount of vacation every year, just so someone else can manage their accounts for a couple of weeks.

Giving someone control of that much money without closer supervision and checking is asking for trouble. Apparently Ward was forging the annual audit reports. That's one reason it's customary to have a personal meeting with the auditor, as Conaway wanted.

[cleek]

what Nell said, way up top.

this likely isn't about Ward skimming for his own gain as it is Ward cooking the books to shift money to people who shouldn't be getting it.

Ward's just going to take the fall for it.

[ThirdGorchBro]

I'm doing fine, libjpn, just busy at work (as usual). The last few years have been a painful revelation for me. I genuinely believed the old saying about the government that governs least, governs best. But seeing the rampant cronyism and corruption and inefficency that has been the modern Republican party in action, has really turned me around on this issue.

I figure, if my choices are a big-spending government that runs up huge debts and doles out the benefits to its corporate buddies only, or a big-spending government that raises taxes to pay for it and spreads the cheese around a little more widely, I'll take the latter.

I still consider myself a conservative, but I have come to realize that also means conserving the social achievements of the 20th century.

[John Thullen]

I don't think bobd should be banned for calling Hilzoy a "Fascist", because I believe it would be silly to ban someone for using a word that they have been given the dubious honor of emptying of whatever last shred of meaning might have remained.

I think this might be a portent of Hitler rising from the dead, adjusting his tunic, looking around and saying, "Yippiejavohlgesschatze, now zat zey haf forgotten zee meaning of zee vord, vher ver vee?

Actually he/she/it put the words "true voice of Fascism" in the Kitty's mouth, which is funny from way too many angles, especially since anyone can email the poor Kitty any time.

I don't think Mussolini had a suggestion kitty box with a sign above it that said, "Let me know how I'm doing, kids. Let her rip."

DaveC. The image of Hilzoy marching around her den wearing epaulettes like a drum majorette and passing in review to martial music tosses my baton. Hey, that's a joke.

Does she pretend the kitchen is the Russian front?

I will admit that I get in moods where I shut the windows, pull the blinds, let the poor cat out, and crank up Tom Jones' "It's Not Unusual" on the stereo while ripping the chords on an acoustic guitar and singing into an unplugged mic, while, who can resist, sweating profusely. Actually. it's sort of a Glen Campbell meets Bill Murray sort of deal, but the song gets sung with gusto.

Then I throw underwear at myself. Then I invite myself backstage. But I always go home alone. Which is a short trip, considering I'm already home.

But never, not once, have I gone out and invaded Poland.

[ThirdGorchBro]

But never, not once, have I gone out and invaded Poland.

Slacker.

[Donald Johnson]

TGB--In response to your 9:11 post, not all of us Obama supporters are starry-eyed at the prospect of his victory. I have faint hopes he might be one tenth as good as the true Obama enthusiasts think he is--mostly I just think he'll be vastly better than McCain and possibly a lot better than HRC on some issues, who along with her husband I find thoroughly repulsive. So I'm not setting too high a bar.

I expect he'll be something of a disappointment and then the backlash against him for his mistakes will be harsher than it has been against Bush, because Democrats are judged on a stricter standard, at least in recent years.

As for Democrats becoming corrupt--well, yeah, that's probably to be expected if they obtain enough power.

[KCinDC]

I prefer The Liberty Bell, for obvious reasons.

But aren't those Monty Python guys a bunch of effete socialist Europeans?

[Sebastian]

"this likely isn't about Ward skimming for his own gain as it is Ward cooking the books to shift money to people who shouldn't be getting it."

I'm not sure why you would think that. In terms of magnitude the money isn't really enough for it to be a full blown "secretly support secret conservative organizations" type of deal. It is pretty good money for a personal embezeller but not a vast amount for the kind of thing you sound like you are talking about. And if it were true, what would be his incentive to keep quiet about that now and take the fall? He is likely to go to prison for quite some time.

[felix culpa]

re JT as a slacker; yes, but a sweaty, privately intemperate slacker.

[hilzoy]

John T: "Does she pretend the kitchen is the Russian front?"

Heh. You've never seen my kitchen.

-- I'm also inclined to think it wasn't funneling money to people (other than Ward) who shouldn't have gotten it. The way the NRCC responded seems to me to indicate genuine surprise.

[xanax]

Thullen: When all's sung and done, do you end up taking advantage of yourself?

[farmgirl]

News reports indicate that the money was tracked to Ward's personal accounts.

[John Thullen]

xanax:

What, now I'm taking questions? ;)

If you must know, I'm very respectful of myself and a little shy.

True, I once I spotted myself across a crowded room and summoned the courage to put the moves on myself, but I missed. I threw a drink in my face and slunk back to the empty booth of unrequieted love.

Some people would call it stalking; I prefer the old-fashioned term "courting". It has occurred to me to get a restraining order on myself, but the directive to stay at least 500 yards from myself is a schizophrenia even I can't manage.

[cleek]

News reports indicate that the money was tracked to Ward's personal accounts.

in that case, i withdraw my baseless speculation.

[Porcupine_Pal]

Fire up the satisfaction at other's misfortune machine.

Dickie Scruggs just pled in his conspiracy/ bribery case. Next on the launching pad: his brother in law, Trent Lott

[trilobite]

Well, Jay, you can go ahead and insult me as being an intolerant censor, but since neither intolerance nor requesting that someone else ban a third party are against the posting rules, I'm fairly sure you can't get me banned for it. But enjoy the attempt. I personally disagree with your characterization, but perhaps if you were to offer some, oh, I don't know, reasoning or evidence in support of it, you might change my views or conduct. Or, you could just spew. Your choice.

The posting rules are linked on the top right of the page. I think calling someone a "fascist" for disliking the RNCC violates two of the rules:

"Be reasonably civil."
and
"Don't disrupt or destroy meaningful conversation for its own sake."
It's not yet a "consistent" abuse or vilification, but that it made zero sense in context suggests to me that bobd is likely to continue on the same path.

I gather you disagree?

[trilobite]

Agree with Donald Johnson's 11:24 AM comment (except for finding the Clintons repulsive).

Obama is not Moshiach. He's also not very liberal. But he's what we've got, and way better than the alternatives. That's enough to get pretty excited about.

[Nell]

farmgirl: News reports indicate that the money was tracked to Ward's personal accounts.

Considering that there has only been a preliminary forensic audit funded by the NRCC, and no real investigation yet, I find this dismissal unconvincing. What news reports? Based on what sources?

It's early days.

Meanwhile, here in the early days, Marcy Wheeler cites Ken Silverstein in finding some suggestive patterns:

For leadership PACs Ward worked on (as opposed to about 3 other different kinds of committees), Ward's MO is to establish a PAC out of a PO Box in DC, show no overhead associated with the PAC, but instead show two kinds of costs: donations to Ward's PCS [his business, Political Compliance Services], and donations to a fundraising consultant (or in some cases the RNCC lawyer); the consultant appears to often be an RNCC employee. Aventum is just one of many that show up [as the consultant] in these scams, and most of them are set up in kind of dubious situations themselves, a storefront office set up in a building filled with bankruptcy lawyers.

For the most part, the leadership PACs donate a relatively small percentage of their money to candidates. And truth be told, PCS actually gets a relatively small amount, compared to the fundraising consultant. So the funds--as Silverstein shows--seem to be funneling money from corporate PACs to the fundraising consultants who are really just RNCC employees.

...if I wanted to turn corporate donations into a slush fund, this is the kind of scam I might pull. Though to prove it, you'd have to go to each of the fundraising consultants and figure out whether they pocketed this money or did something else with it.

Read the post, and the article it links.

The loosening of internal regulations at the NRCC coincided with the passage of McCain Feigold, and with the full flowering of Tom Delay's brand of leadership in the party. The top Republicans in Congress encouraged the pooling of all the different streams of money in the committee into one, while accounts were opened at a dozen branches of Wachovia. At the same time, the size of expenditures that would have to be approved by the NRCC executive committee was raised to $10,000.

Think there wasn't any "structuring" going on?

Oh, I'm sure it was all just one man lining his pockets.